Friday, 07 July 2006

The Indian Mirage ?

In an oped in the New York Times, Pankaj Mishra argues that India isn't doing as well as some people believe and that even though it is a good place to do business, it is not a good place to live.

He argues that,"But the increasingly common, business-centric view of India suppresses more facts than it reveals. Recent accounts of the alleged rise of India barely mention the fact that the country's $728 per capita gross domestic product is just slightly higher than that of sub-Saharan Africa and that, as the 2005 United Nations Human Development Report puts it, even if it sustains its current high growth rates, India will not catch up with high-income countries until 2106."

However, in Foreign Affairs, we get a more optimistic view of India, one which focuses on the progress it has accomplished. In one of the articles published on India in that magazine, Gurcharan Das, the former CEO of Procter & Gamble India, writes: "Even though the reforms have been slow, imperfect, and incomplete, they have been consistent and in one direction. And it takes courage, frankly, to give up power, as the Indian state has done for the past 15 years. The stubborn persistence of democracy is itself one of the Indian state's proudest achievements. Time and again, Indian democracy has shown itself to be resilient and enduring -- giving a lie to the old prejudice that the poor are incapable of the kind of self-discipline and sobriety that make for effective self-government. To be sure, it is an infuriating democracy, plagued by poor governance and fragile institutions that have failed to deliver basic public goods. But India's economic success has been all the more remarkable for its issuing from such a democracy."

I think that how one views India depends on whether one chooses to see the glass as half-full or half-empty. It is true that it is too early to say whether India will become a superpower, but it is also true that it is a nation which has tremendous potential and which has accomplished a lot since its independence from Britain. In my opinion, India has the fundamentals required to become a powerful country (size, human capital, democratic institutions, stability,...etc), the biggest challenge is governance, that is the way politicians and other members of civil society will choose to solve important problems such as poverty and inequality. If India doesn't fulfill its potential this century, it wouldn't be because it couldn't become a great country, but rather because its political class made the wrong choices.